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tv   Key Capitol Hill Hearings  CSPAN  December 15, 2014 10:00pm-12:01am EST

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i agree with mike you have to build in different protections with the actuary do those protections but i would note that when it comes to looking at actual social security plans when they do then they do them on the 75 year projection including saving social security plan. people do target the 75 year solvency and if we are targeting it when we are legislating the question is wide-awake target
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when we are doing automatic adjustments? with that said i think it would be an improvement however we did it so if we to indexing when it came to when it came to individual parameters that would make sense as well. one thing i would notice we should be sure to index both the benefit side and the revenue side as in fact peter diamond suggests. to be critical of such an automatic mechanism would not simply be solvency. our current system would probably be made solvent. congress will just get around to it later and focus changes on later generations. so the idea here is to spread the adjustment of properly and especially to share risk across generations but i also don't mean to suggest this is the way we will get to solvency from where we are today. right now congress and the president do need to agree eventually a compromise. the point is we can build on these kinds of mechanisms and to
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compromise legislation so as to preserve the dealer has made an spread risks across generations rather than waiting for adjustments and concentrating them only on certain generations. medicare of course is also an area of major uncertainty. our health cost growth trajectory is very uncertain so the question is how do we react to that? let me start off by saying how automatic adjustment mechanisms could be used here. specifically they can be used to adjust financing either up or down as one could set a baseline whatever is your expected or desired trajectory for health care costs and then adjust financing to at least partially offset changes relative to that trajectory. we already do this when it comes to medicare premiums so irrespective of how fast health care costs grow premiums will still offset about 10% of medicare spending. the same is not currently true
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of payable taxes or general revenues including income taxes which also finance medicare so as this graph shows that health care cost growth simply followed income growth payroll taxes would finance one quarter of medicare looking out 75 years. they grow one percentage point faster than income annually consistent with the cbo baseline that would fall to just over 10% of medicare costs. so payroll taxes than income taxes could be indexed partially to automatically adjust depending on the trajectory. for the payment side of medicare it is much harder to figure out how to do these automatic adjustments. that would be manually constructed the map shows the limits of it. that's because we have less information about appropriate policy responses to different cost trajectories. we don't have great information now about reduce costs and effective ways 30 years from now whatever the policy responses are we can't readily trigger via formula.
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but there are other tools for addressing policy drift beyond the automatic ones. for instance alternatives to triggers like the ones i've been discussing his delegation and it has been historically used in this way. congress can delegate authority to an agency with better ability to adapt policy and in medicare this isn't that part of the logic around some of the reforms in the affordable care act. that includes the medicare independent payment advisory board with powers to adjust payment policies under certain circumstances. now it is unclear if it will ever get off the ground given congressional opposition in certain aspects of its own construction but this kind of delegation makes sense for helping to address uncertainty on the spending side of the equation and medicaid. in my paper and discuss other tools as well in addition to delegation and can be used to address policy whether medicare or other areas.
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this includes alarm bell triggers in the expirations. these are mechanisms that try to force congress to address an area even as circumstances change. so instead of the idea is to force congress's hands to focus on an area and compromise as circumstances change to a certain degree. now each of these mechanism comes with trade-offs and in my talk i focus on adaptability to no economic circumstances and along these lines automatic adjustments seem clearly superior where they can be developed. that is the first place i turn but others may give greater weight to some of the other factors identified as being relevant. before i conclude i want to offer a few words of caution. first with regard to alarm bell triggers and explorations. these are mechanisms to adapt policies under certain circumstances often by creating this set of circumstances that
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are so distasteful that congress just passed it asked or at least that's the theory. a colleague of mine calls these -- the current sequester being a leading example but they come with a severe risk. namely they may actually go off and congress may fail to respond. in a case policy drift may become even worse than it was. so they can end up being counterproductive along those lines. second the goal of reducing policy drift should not be confused with reducing year-to-year volatility in the budget. the country faces uncertainty on a number of dimensions. in the face of that may be tempting to to make the budget on responsive to changing circumstances and thus reduce year-to-year changes in the fiscal balance. that could be done through block grants or targets like the balanced budget amendment. in my view this goes in the wrong direction at least in terms of policy drift.
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you could end up with policy that's less responsive to changing circumstances today. still the benefits of using such mechanisms appropriate legislation are real and significant to put it concretely can be used to be reduce unemployment diversify risk across generations for social security and they can help adjust health care policy if growth exceeds certain levels while adapting. i should also say i at least am somewhat optimistic about the ability policymakers to consider these issues given the fact a number of these tools have been used historically. i think they can be expanded in their use but we have policymakers thinking to some degree in terms of uncertainty. i think we can focus on the more we can accomplish the very important policy goals. [applause] >> thank you.
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thank you very much for that. i want to note what i said before just that all the papers that were discussing you really only get a taste of them from the discussion. they are all on our web site but in addition to the papers are colleague henry aaron has written a paper which he posted which expresses a bit of skepticism about the usefulness of long-term projection. i'm very pleased to be joined by three people who actually have practiced at this art and science. bill hoagland who is now with a bipartisan policy center and spent 33 years in the federal government 25 of them in the u.s. senate. most of that time on budget issues and he did little stands in the private sector at cigna but we don't hold that against him. gene sperling has been a fixture in washington since the original bill clinton campaign and director of the national economic council not once but
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twice. the actually one in one of his few periods out of government was the director of the center of universal education which is the brookings foreign relations joint venture -- venture but most importantly if you don't like triggers you can blame gene because he had something to do with almost everyone that i can remember in the time that he has been in washington. frenemy have jim cooper who is the democratic congress and from tennessee. something he has done for all but eight of the past 32 years. he has made a name for himself as somebody who is focused on budget issues and not afraid to say what he thinks even if it's not popular with the leadership of his party. and i want you all to respond to david's paper but i feel there's a question i need from the first panel and jim cooper maybe i can start with you. somebody suggested members of congress were psychologically of the belief and capable of
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thinking about uncertainty and i wonder whether you think that's true or not. >> you are getting me in further trouble with my colleagues that it is the profession of. >> students. [laughter] that's on a good day. then throw in the fact that economics is a profession. we survive on happy talk but i am strongly in favor of allen's by george for cautionary savings. but that is very unpopular speech material. i think it's almost a hallmark of civilized people to be able to delay gratification raid we have seemed incapable of doing that today. it's would have you done for me lately in politics. i'm very appreciative of balance paper and advocating the uncertainty. >> before we comment on david's paper i have an observation from a practitioner's point of view. i started my career at the
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congressional budget office and i was in charge of making estimates for the federal food stamp program now called the s.n.a.p. program. i developed this wonderful model and i had estimates going forward. it i was called over to the chairman's office to explain my estimate. i went in and i said i want to be prescient with my econometrics. i said this is my point in here is the standard estimate and here's what the budget looks like in the future they looked at many said young man we don't appropriate in ranges. [laughter] that always led me to the conclusion that as much as i like to talk about it at the end of the day it's a number that's most important to congress. >> you have talked about uncertainty i'm sure. is there a ready audience or are politicians cognitively incapable of dealing with it? >> the one thing i wanted to raise because allen's paper i
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think we really have to look seriously at it not just in our normal thinking about fiscal policy we have had for the last 25 or 30 years but in terms of what has happened in fiscal and monetary policy in the last seven or eight years. so on one hand i think much of the premise of what we did in the 90s was for cautionary savings. you can see that we have to project not only that you might have a downturn but that you might have a stimulative effort and what that does. the other side about though is that to look at the other extreme is generally where a biased towards this has been one of the most harmful things, and where, and i just think and in fact i believe that we have some great central bankers here that
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we are seeing a row at efforts by bernanke and the others but they are efforts that are exceptional things that monetary policy has to do because fiscal policy has completely failed in europe, is trying not to fail in japan and while we are the least kid on the block we still underperform. so i do think we have to really take a fresh look at this and how it relates to our responding. among the second issue i would make on that is that i do think that one has to take a little more seriously the dude no unnecessary harm mandate. one place to see that in our policy is the discretionary sequester has been a terrible thing that was implemented back then. now there is always a part of the sequester that hits the entitlement side where they do protect the low income programs.
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the reason i say this is if you are looking in the early 90s etc. as much as you might have disagreed with newt gingrich you perhaps fear that perhaps one might have to do more reductions across-the-board that could hurt people you wouldn't want to, that is possible to get to that point. it was quite a lesson to see four or five years later what a terrible thing and an even more terrible thing it would have been in the first half of the 90s to have so cut food stamps medicated and found out a few years later that there was not even a case needed to do that to have surpluses. but then think of the harm that would have been inflicted on so many low income people that was not only may be the wrong distributional choice but from a fiscal policy was completely unnecessary. i do think you have to caution against the cautionary savings with the idea that you do not want to put shared sacrifice on
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people who are not particularly well off unless you absolutely absolutely have to. i think that has to be built-in airing much to these discussions. >> let me turn to david's paper. jim cooper, went to these legislative citizens, triggers triggers, expiration dates, alarm bells work best and when are they just useless? >> i appreciate david's efforts to help us to design legislation to save congress from itself but that is a big job. i would suggest that david's excellent paper is the first part of the trilogy because congress is marvelously responsive and prompt to the private sector. it's only public goods like policies social security and medicare where we are somewhat slow but you can divide those because many private firms benefit from those public
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programs. it turns out we are responsible to medicare and others that benefit handsomely from legislation. so it's really only the public good that it shortchanged. i have been on the scene for a few years now and the taxpayers the only person in america who is not allowed to pay congress for performance. special interest all up and down washington pay us for performance everyday with contributions, speaking opportunities and other things so why is the taxpayer handicapped? partly the constitution prevents anyone from cutting our pay but also the idea that everybody makes the same than house make makers -- house leaders make what senators make which is really nice. it is really a think a handicap because in our materialistic culture you get what you pay for. we are very able at figuring out
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what private interests wants. i wish also he had put in this paper more behavioral economics because to me is that type one blizzard brain that determines so much of our activities. it's not this type to cerebral statistical analysis. i'm not implying by colleagues or reptiles. [laughter] we do have to speak to our audience. people want a certain number of prepared. people want a great fix. we cannot see out of politics by those as they'll go one more drink and you will feel better. to me we have to go with alan's biased source for cautionary savings to overcome inherent political trends towards demagoguery. >> what about using indexing to essentially tie your hands in the future? >> my greatest worry is we have already given up governance.
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jane sterling's book world by nobody almost two-thirds or three-quarters of what we did in congress is predetermined so we don't even have to show up to work. in fact the trend is such that the most popular way to run for congress is to promise he will never visit washington in that way you won't be tainted by what goes on here. it's not just the entitlement autopilots that the tax expenditures and things like that of course we automatically extend all those. in a cerebral world we should use some of these triggers. we have some of are ready. that is fine-tuning a terribly broken institution when it comes to public goods. i'm more interested in getting less responsive to the private sector. we are well oiled machine even in this latest cromnibus when it comes to meeting the needs of a lobbyist. so why don't i get her name on there and let the taxpayer in the social security beneficiary and the medicare beneficiary benefits us as well as the people on main street.
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>> what are the conditions when triggers are in the public interest and when did they become a sequester a stab in the foot and maybe other body parts? >> let me raise a little question about the whole uncertainty framework and then i want to throw one more thing on the table which anything goes to to what may be more current topic. first of all, i think as david said we have binders of triggers that would never see the light of day. but the question is really is a fundamentally about economic uncertainty or is this more intelligent people understanding that we love democracy but the limits of our democratic system to act quickly and with speed to
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economic situations generally and building in ways that we can respond without having to force ourselves to go repeatedly through the political system but we have trouble responding with the speed necessary. that's slightly different than just the uncertainty. it's a little bit more intelligent people, aa students in congress, recognizing like a boss might recognize they travel a lot and they make their whole team way to get there -- that might be a bottleneck that would keep their company from doing well. here that bottleneck aarp political difficulties of people coming together and doing something. that context i still think the strongest case of david's is on the cyclical issues. i think and the reason i say that is, david just gave unemployment.
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you could do the gdp side. we were looking at 3% negative growth. we now know was 8.2% and over 5% in the first quarter so about 7%. i don't know when exactly that was adjusted so the question is though is that the reason people could do more? that's not my memory. my memory is you just couldn't get a dollar more and get 60 votes in the united states senate so it was much more the political constraint than the economic team was like oh weeper for 800. that's a magic number. people would have taken more if they thought they could get it. then what you saw after that was enormous fatigue. i think that there are areas that you have a different share of medicare and medicaid based on poverty. having that medicaid share go automatically increasing in difficult times. >> the federal share of
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medicaid. >> federal share that is not a medic adjustments and can be made. having long-term extensions for prolonged unemployment, these are things people have to do better difficult. most people know they need to be done. if they are done automatically those kinds of triggers at the absolute good policy and they would be politically acceptable across-the-board for two reasons. for one, they go on and off so if you are in the conservative side it's also a way of turning off without having to ask. secondly there's not a moral hazard issue here. in other words you're getting more based on economy being week not that you are having fiscal problems at the state level. i think that is where the triggers are the most promising. where i disagree is i guess on the entitlement side i think they play an important role. i think it is much more in the prompting action overcoming
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constraints probably than the uncertainty. i'm with marty i think on social security. to design a social security trigger with the percentages of revenue, cuts and distribution seems to me as difficult as actually passing social security reform. if you are trying to overcome the constraints i don't know that really adds much to it. on medicare i think the delegation issues are often more about expertise that uncertain uncertainty. it's just a little crazy sometimes for any of us to have to get to the level of detail on the different market baskets etc.. there would be responsiveness of expertise regardless of the uncertainty. but i still think these plain important role. the one lesson we have learned and it's interesting what we say david wesley called a sequester, we call that bad
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mutually-assured destruction. he would try to prompt action by doing something so offensive to both sides they wouldn't let that happen or nobody would be stupid enough to let that happen and we underestimated ourselves. but it's interesting that we were trying for most of the time to have a different type of trigger which now has a greater case made and that's what i call a crude but acceptable trigger. you are going to raise this much revenue. you are going to do the same cuts. they are not going to be done in a pretty way that they are livable. in other words after what has happened in a sequester people may be more prone to say if this doesn't force everybody back to the table will it be more livable? my last point which i think is the most interesting and most topical right now in fiscal discussions is we have failed to
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be as expansionary as possible during a global recession and coming back from a global crisis. a single piece of legislation that expands demand bashar one but gives compliments on long-term fiscal policy. the response you get from intelligent legislators and policymakers is we don't trust that the second half will ever happen. i think part of this having a strong around the fiscal policy and economic policy is having a sense of triggers or mechanisms that gives people confidence that they can perhaps put their foot on the accelerator or might not make difficult cuts at the moment that they will have to eventually in the places that is most relevant and then i will shut up his health care right now. i think as a policymaker when you read doug's whether you read
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jason furman's's charts or doug elmendorf's charge they slow down health care is dramatic. that's going to make life pretty tough come even tougher for members of congress because now you are doing difficult policies on health care entitlements that you are not 100% sure how much you need to do it so you could say then don't do anything but that goes completely against alan's paper or you could say would see if health care costs get down and encourage people to get health care cost down to work on payment reform because you know in 2025 if you don't something is going to happen. that to me as i think the most promising area right now for helping us deal with policy is encouraging behavior less on behavior and one encouraging appropriate policy behavior but yet giving people certainty that
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the tough choices will be made if you don't figure things out early. >> when i things things credible and when are they just excuses for not acting? >> in terms of david's paper before things he had come delegation, auto triggers census index and i hate to sound like a screwed here in the holiday season but quite frankly the only one that i can come around to that has some potential is the auto triggers. we have a lot of them. i find the other kinds of approaches whether it's the triggers such as gramm-rudman-hollings there was a reason for having them. maybe they would force congress to act. they did act. not the way you wanted them to act that they did act on it.
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i just want to say in terms of some things james said number one i think the best approach and 11 of the better approaches for social security is what is mentioned in the index for longevity. i would also note in david's paper you never set in your paper the triggers you were talking about would solve the insolvency. you said solvay insolvency and then put it -- but let's first solve insolvency before we move forward on that. he also mentioned mentioned that he's a area which james is referring to his counter-cyclical and that was the real issue focusing on the stimulus bill. if i read your paper correctly what you would like gene to say sitting to left agena question is whether or not we should have automatic discretionary spending triggered in. i just have to raise a red flag here a precautionary flag that
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our worst possible outcomes would be for the long-term fiscal stability in this country is to have some sort of an automatic increase in discretionary spending. i'm not there. so there are some of these issues that you raise. >> why? >> because once they are put into effect, once discretionary spending goes up i know you will say just turn them off. i've heard that before great second of all i locate your charts when unemployment started up i saw a lot of peaks in unemployment that didn't lead to a recession in the chart we put up. they think they're so much uncertainty that i would rather, let me put it this way. i have focused on two other kinds of triggers. congressman cooper's position on behavior. i wish we had a trigger that said no budget now pay and i would say also if you don't pass
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appropriations that have been beginning of the fiscal year you have an automatic continuing fiscal trigger. those are the triggers that have an impact on your decision. >> the one thing i want to mention as is the things i mentioned were on the mandatory side. medicaid in employment or areas that would go up automatically her down automatically without congress having to get it exactly right. >> we have an automatic stabilizer already but we require congress to extend it to more weeks when things go bad and they usually do. that could be automatic and if the unemployment rate came down that could come off. >> that and medicaid are the two places we have in place. we already do it to a degree expanding into making it automatic would make a lot of sense. i think you could make the case
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because it turns off and it doesn't have a moral hazard. it's just been triggered by the health of the economy. i could see that being a more plausible reform that could actually happen. >> david let me respond and we'll have time for a couple of questions. on a few issues, first when it comes to the question of triggers and stimulus and stabilize demand, actually one risk you identify is triggers turn on and they don't turn back off. i would note in terms of jumps in unemployment you can actually with relative accuracy predict when you are entering a recession. unemployment is highly associated with recession. if you draw a line in the unemployment rate over six month period that has all of the post-world war ii recessions they were only two points of time we weren't entering a
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recession. whether you are using that index or another index their ways of targeting periods of recession. second looking historically, while i agree there have been some provisions that have stuck in law when you put in place when it comes to the stimulus policy at least on the spending side seems like we tend to have the opposite problem. certainly in the last recession. so we have had the turnoff of state fiscal relief. it was not further extended extended. when it came to infrastructure spending would have a slow spend out with any dramatic chalifoux cliff but was not further extended so it's actually not a theory that if we had types of triggers which increased infrastructure spending automatically during periods of automatic recession that would be automatically overdone and there would be a chance that would better improve economic performance without congress not allowing them to go back down.
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so on a few other points when it comes to entitlements i completely agree with gene that when it comes to trying to build these kinds of triggers into social security it looks a lot like negotiating final social security deals and in fact i completely agree. i think it can only be built into an actual social security deal where there's agreement on the parameters of the deal and then they say we want to stick to that deal so we will then build in the triggers and stick to that deal. it could happen if you reach that point again but it's not a way of solving the social security problem. the only other point i want to make is when it comes to delegation and in comes entitlement programs you are right part of his expertise. so when it comes to delegating medicare some of the experimentation they have going on at the centers for medicare and medicaid services they actually did know what works have empowered them to do experimentation and potentially
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ramp up experiments and implement them broadly if it turns out they were. that's an example where you uncertainty as to what works and congress will not have to revisit the issue and delegate the ability to fully ramp up reforms if it does work. >> we can take two or three questions and then we will answer them and then we have to break. in the middle there and then in the back. >> find that miller working with states. one correction to gene sperling. the medicaid match race has a 4.5 year lag between the data used for it and the year it is used in. it's often procyclical so that's not something i would recommend as a cyclical event. you measure the difference between the. >> was saying the same thing you were. i was trying to build than
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having a share based on what's happening in the economy at that moment not on the poverty gap so we are actually in vigorous agreement. >> but the difference between the big bang and the trigger response, the ira gave most of the state assistance through medicaid so states may not change their eligibility which they did and which meant that states cut back on everything else including education which now has become the baseline for education for the future. this is what happens to productivity. this is a good thing? >> okay, one in the back. a couple rows back emily and then there's one on the left side. >> i am mark. really a comment and that is when you talk about the entitlement program particularly social security bears very little uncertainty about the cost of the problem and in fact there hasn't been uncertainty since the 1970s when the birthrate dropped or the 60s.
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we have known about it for a while and sort of a decades long certainty and actually it goes forward. in fact 83 reforms probably would have benefited from a longer horizon because we know what was going to happen. and there's very little uncertainty about that. that applies to a certain extent about medicare and the other democratic dependent programs. so i'm not quite sure i understand the triggers an automatic items are relevant for those programs. >> okay that there is one of her here. >> thanks. i just wanted to make a cautionary point about the fiscal policy. this last downturn was very different from previous recessions. previous recessions from
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peak-to-trough lasted 10 year years -- 10 months on average and because of that i think fiscal policy rightly got discredited ashes short-run stabilization mechanism and indeed in previous recessions monetary policy was more effective because you didn't have the collapse of the financial sector. so this time was different and it paid to do fiscal policy. it was clear was going to be deeper and longer and monetary policy wouldn't work but the idea of using fiscal policy in general when the unemployment rate spikes or the gdp numbers is negative runs the risk that the legs are such that by the time we have actually hit the stimulus the economy no longer needs it when you were stabilizing rather than destabilizing. >> we have to get back on
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schedule so briefer sponsors and then we will come back. >> first when it comes to social security and uncertainty you are right that part of the challenge facing the social security system in our fiscal situation more general is well-known and that we had baby boomers working their way through the system. with that said there is considerable uncertainty as to exactly what the picture is going to look like going forward so for instance if i mentioned the optimistic scenario that the trustees put out and they put out three different scenarios as we said shows the system remaining solvent on a continuous basis. that is one possible scenario. there are other scenarios as well. the point is what we do know some parts of the challenge there remains considerable uncertainty about productivity growth, factors that go into affecting social security balance. imagine the system automatically adjusting to some of those factors. when it comes to stimulus
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marty's point of course is a good one. i think that main fact when it comes to fiscal policy that more things be automatic and not have a significant lag so one could say to the extent one could take it out of the hands of congress at a better time you might end up with better policy and in those situations where you are doing a discretionary stimulus such as the great recession you may also want to build an additional tax. >> with a time constraint. doug elmendorf has to leave so we are literally going to take a five-minute break that i'm going to start in six months so if you want to hear the good stuff that follows, you have to be back here in six minutes. [inaudible conversations] now congressional budget office director douglas elmendorf joins a discussion on the challenges
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of the federal budget process. from the brookings hutchins center on fiscal and monetary policy, this panel is 50 minutes. >> one of the things that we try to do in this panel in which we intend to do in the future is to use the opportunity to get views from other countries to see what we could learn from what they do so we can continue to tell them how they have to run their place much more like we run ours even though we seem to have lost a little moral authority on that lately. and the other thing is that we have tried to bridge the academic and practical here. this is not the national bureau
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of economic research. we are not afraid to say what ought to happen but we also think that it's important that policymakers hear the best ideas of academics but also academics learn something about what it's really like to practice policy here in washington. so far the final part of our event today we have invited to people who are really more qualified than almost anybody else to talk about the question of uncertainty and how policymakers reacts to uncertainty. we are going to start with robert chote who became the first record the british office of budget responsibility in october 2010. he was previously with the institute for fiscal studies and the international monetary fund but most importantly he spent a decade as a journalist with london independent for finding more productive ways to use his time. after he speaks he will be joined by doug elmendorf who is
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at least for a few more weeks to record the congressional budget office a post he has held for eight years and of course among his previous activities was serving as a senior fellow at brookings. robert is going to speak for 10 minutes and then doug is going to speak for 10 minutes and then they will join me on the stage and we will invite previous panelists and the audience to ask questions or make contributions so robert. >> thank you very much david. good morning everybody. it's a great pleasure to be here a reminder there is productive life after journalism. what i'm going to do today is give you a little background as to how the resolute -- relatively newly-created a pr is addressing these issues in recognizing uncertainty and the goals that we have been given reflected through policy. let me start with this brief bit
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of institutional instruction for you. we are an independent institution created in 2010. we are accountable simultaneously to the executive parliament in the u.k.. we have been given for main task to fulfill. the first of which is to produce forecasts twice a year for the economy and the public finances and secondly to use those forecast to judge progress towards the explicit fiscal rules that the government has set itself. that is one rule in terms of a particular structural budget deficit to five years ahead and another rule for the trajectory of debt-to-gdp. our discussion of uncertainty should be couched in terms of what that is telling about the government's progress towards explicit fiscal rules. the third thing we do is to scrutinize the scoring of tax and in particular welfare and social security spending measures and then we also assist
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the long-term outlook of public finances much as cbo just looking over a looking over 50 are rising and what we can learn from the measures of the public sector's balance sheet. putting that in the u.s. context when you think about the key differences from the structure to cbo, omb structure here i guess one point to note is all our analysis covers the entire public sector not just the equivalence equivalents of the federal government level. we are by parliament confined only to produce projections on the basis of the current policy of the current government and not for bid and from looking at policy options in the third thing is the executive administration in the u.k. does not publish its own fiscal projections. we are the provider of the official fiscal projections and this is for the government to comment on what we say, not for us to comment on the figures that they produce. in that context thinking about how uncertainty comes to our work i think as a background
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it's important to bear in mind and budget setting in the u.k. the executive is very powerful relative to parliament compared to the relationship to the administration and congress here and the treasury department in the u.k. and it's a quasi-omb role is relative to cabinet departments. the creativeness was very much to try to remove politically motivated wishful thinking rather than to help parliament consider options for cbo. when we set out on this transparency and to emphasize uncertainty. given our need to produce a highly segregated fiscal forecast transparency necessarily means lots of detail and a lot of testaments. why emphasize uncertainty? first the point that we heard in earlier sessions that policy should reflect uncertainty rather than ignoring it. it's important because of the detail that we produce but
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talking about uncertainty allows you to avoid the precision that comes with publishing lots of detail. we can offer richer assessments to progress towards the target and perhaps the first person to run this organization permanently mocking other people's economic and fiscal forecast as a journalist i didn't want to tie the success of the institutions accuracy to forecast. there are some self-interest in there as well. we do our outputs a narrative qualitative sense and quantitatively. in the narrative that means being as explicit as we can in the forecast presentation and publications we do as to what the conditioning assumptions are of the forecast and therefore what are the implicit risks that the assumptions turn out to be true. the idea for example of monetary policy would involve with market expectations and things like equity prices in oil prices and
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the exchange rate seemed consistent with the market expectations. we take care to identify specific economic risks that may affect the fiscal forecast in any particular presentation reduced to what happens if stability reasserts itself and what happens and what happens if the new global outlook for them loosening of monetary policy and a path for productivity and wage growth. one of the key puzzles has been wired to a growth has been so brief by historical sprains and whether that's going to reverse itself. we will try to identify specific risk conditions on economic forecasts. a key one recently is to look at what is driving effective tax rate so the actual tax rate and amount of revenue raising per pound in our case of a
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particular tax base we are talking about. one of the reasons in the forecast air is not simply we have overestimated the aggregate size of wages and salary and labor income but the average tax rate has been less than expected partly because of distribution of pre-tax wages. perhaps finally to cbo's work would uncertainty we see around the scoring of particular policies. we provide, we don't provide what chuck would like, a competence explicit confidence interval around the estimates in particular is going. what we do is provide a subjective uncertainty ranking from each policy that we sign off based on the quality of the data, the nature of the modeling you have to do to get estimates
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and the nature and uncertainty surrounding behavioral response. i think merely listing those sources of uncertainty underlines how difficult it will be in many places around the particular estimate. in addition we try to look at risc quantitatively. we quantitate uncertainty to the chances of hitting that target the government is up for sale. the combination of having an independent forecast and explicit fiscal rules set out by the government is in a sense we smokeout policymakers and receive preference of how much margin for error they want to put in achieving that target against the central forecast which is one way of saying how much do you want to overachieve in order to address the uncertainty? we use three main techniques to illustrate uncertainty. probability bands implied by --
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sensitivity to key economic determinants and scenario analysis. the key thing is not just to say these projections aren't certain but how long does the forecast have to be and in what ways does it have to be wrong for the targets to be in peril? just to put a few pictures on those that simply shows probabilities around the central forecast with a particular measure the budget deficit based on the size and distribution of past forecasting errors. we do mechanical sensitivity analysis so you take your central forecast for the targeted fiscal variables and say what difference would it make if there was more asked that capacity in the economy faster or slower gdp growth in the central forecast and one of government bar when costs interest rates on government debt are higher or lower? in that context if we are looking for one major source of uncertainty both around the achievement of the targets and are fiscal projections more
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generally it's the uncertainty as to what is the level of potential gdp, what is the path of real and nominal gdp to which you would expect the economy if the central bank is doing its job of hitting the inflation target. you can see here almost everybody looking at u.k. assumes it's a lot lower than the path we anticipated prior to the crisis but there's a lot of uncertainty around it precisely. scenario analysis we use in addition to highlight some particular key debates or critiques in our forecast that may be put forward at any given time and some areas of clinical sensitivity that the public may misinterpret. so what difference would it make if productivity growth and inequality -- economy were higher or lower? the fiscal consequences depend on the economy doing better than
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we expected or whether it's driven by a risk premiums or something like that. we can add additional information on uncertainty in risks from measures of a balance sheet. the u.k. has a whole of government accounts or commercial accounting basis. that includes a list of contingent liabilities, that's liabilities that are skewed not in the central forecast but whether there's a nonnegligible chance, things like cost of the public health care system, challenges to decisions on tax collection. there is also a list of unfortunately unquantifiable contingent liabilities which we note and there's not much more we can do with that, my favorite amongst those is the power the government has for a requirement to return the land to the suitable condition if it ceases to operate. [laughter] so fill it in with flowers or wisteria around the entrance but it's in there anyway.
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in terms of the long-term projections most of us so far it's been on the medium term. i think the story here is similar to the projections that the cbo produces. it allows you to take onboard demographic change and we have sensitivity and houses on different population pass, different relationships between interest rates and growth and we can look at specific issues on the tax revenue side, for example where there are long-term trends in the average tax rates. finally let me note we see is the flipside of emphasizing uncertainty is that creates a responsibility to learn from our forecasting errors after the event so if a specific publication we produced each year separately from the forecast in which we look back and decompose the forecasting errors and say how much of this is because policy changed after the forecast classification changes, how much of it was
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because the economic determinants were different in how much because the physical forecasting, specific forecasting error was different? is not reassuring in the sense that you end up having been wrong. it's interesting to see that we were wrong three years ago for completely different reasons for the reasons we thought we were wrong last year. thank you and i'm happy to take questions. [applause] >> there are we are. thank you. thank you all. i will start. one quick correction for david. i've been senior director for six years. it may feel like atu and it feels like eight to me but it's only been six. my colleagues and i at cbl are
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acutely aware of the uncertainty of the budgetary and economic estimates that we provide to congress. we view our estimates as representing the middle of the distribution of possible outcomes. the friedel explain the estimates that way to members of congress and their staffs and we often discuss risks to our estimates. so i take chuck's concerns seriously than my experience the members of congress are quite aware of the uncertainty of our estimates are in fact it's not too uncommon for them to think we got the sign of the estimated effect wrong in addition to the specific magnitude. i think the issue at hand is not whether we should communicate the existence of uncertainty but whether attempts to discuss and to quantify that uncertainty provides additional help to congress in the choices it makes. we have worked hard in the past few years to quantify the uncertainty of more of our analyses. but there are important limitations currently on our
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ability to do that quantification can to help legislators make effective use of such qualifications. let me begin by discussing the things we do and then talk about the limitations we see. so we quantify the uncertainty of our estimates in a number of contacts and i will give four examples. first we estimate the macroeconomic effects of changing fiscal policies we now regularly provide both the central estimate and the range. the ranges allow for uncertainty about the response of labor supply to tax rates, the effects of changes in budget deficits on national capital flows and other factors in these ranges are intended to cover roughly two-thirds of the distribution of possible outcomes. one example of such analyses are estimates of the short-term and long-term economic effects of alternative paths in the federal debt. the second example is in our long-term budget. i'm sorry that didn't work out here. we regularly include projections
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to alternative scenarios. in july we showed what happened to the budget in four key underlying factors. the rate of decline in mortality the growth of productivity interest rates and the growth of health care costs differ from the values that are used in most of the reports. the chapter discusses other sources of uncertainty that we do not quantify. similarly the published additional information on our long-term projections for social security that regularly includes a range of possible outcomes for the social security trust funds based on the historical year-to-year variation in key demographic and economic factors. this analysis suffers from weaknesses that peter identified for similar projections from the social security actuaries. the third former quantification of uncertainty occurs in some analyses of specific federal policies. example here is the estimates of the effects on employment of raising the minimum wage. we also provided similar ranges for estimates of the effects on
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the federal budget of adopting a more competitive system for medicaid. a fourth in slightly different way in which we codify uncertainty is to analyze the outcomes differed from our estimates in the analysis that robert just discussed. we do a recurring evaluation of our economic forecast which i've shown here. we have an evaluating of our revenue forecast coming up shortly and we also published rules of thumb for how much budget outcomes vary for a given variation and economic periods. still the vast majority of c. -- cbo's estimates are without ranges. i think there are three principle reasons for that. first the congressional budget process requires point estimates of the budgetary effects of proposed legislation. bill hogan put this in a more pithy way than i will but budget resolutions provide committees with allocations to express point values. the house and senate budget committees track the estimated
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budgetary legislation using point values. the statutory pay-as-you-go wind after 2010 in various parliamentary rules of the house and senate all are enforced using points. a range that encompass to comply with budgetary rules would not be used in those procedures are enforcing those rules. we do need to provide point estimates. one might argue that the congress should change its approach to explicitly reflect uncertainty but developing comprehensible procedures and rules that use a range of figures rather than point values seems quite daunting. the second reason that cbo does not provide ranges for its estimate is that we often lack a strong and alex -- analytical basis for constructing such ranges. ..
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and doing additional modeling we have gotten additional information needed to quantify. that would delay the release of particular estimates and our turning to other analyses or estimates. and the third main reason that we do not usually provide ranges of estimates
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is we are still developing ways to help legislators make effective use of our quantification of uncertainty. part of the challenge is providing ranges for estimates sometimes muddies rather than enhances general understanding of our analysis. when we report ranges people who like numbers to be big ten to take the top end. people who like the number to be small tent to take the bottom end. that can make the public discussion quite confusing. we have a limited ability to clear up the confusion. another part of the challenge is, it is often unclear how legislators might respond to the quantification of uncertainty, and we in the analytic community more generally have the vote limited guidance in this area. it is it is useful for legislators to be aware of the uncertainty of budgetary and economic estimates. as we said, we think they are. the harder question is what else might they do with a
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particular a particular quantification of uncertainty that we could provide. you might no, pick policies that have viability. we did an analysis, for example, whether a certain change in health care benefits that have been implemented was resulting. we concluded that he probably has. a somewhere analysis would be considered and helpful. another example, in some situations lawmakers might want to adopt policy with a smaller variance of budgetary effect to reduce risk to the federal budget. for example, understanding the understanding the extent of uncertainty about future
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federal spending that arises from uncertainty about lifespan might affect whether policymakers index knowledge ability for certain programs. another situation, legislators might might want to adopt policies with a larger variance, the means of experimenting the best policies. they can help to sort out the situations. it is a complicated problem. the the might want to respond to greater uncertainty. on the other hand, legislators might want to respond by focusing west help to guide policymakers on that issue. the early days of this analysis.
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limited at this., and in turn that leads us a limited portion of our time. i would like to conclude by emphasizing that we are working hard to quantify uncertainty, but their are also important limitations on our current ability to do that and help legislators make effective use of that information. thank you. [applauding] clicks thank you very much. we can encourage the people to join the conversation. do you have to express an opinion about whether the government has a greater than 50 percent probability? >> yes, sir. a joint median forecast.
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interesting that the formal physical targets is not the only thing. one of them is not achievable. actually, the government is focused on other things like the particular date on which it expects to balance the overall budget. you are absolutely right. it is it is not necessarily the thing that policymakers. >> a little bit more about what this is like. do you find maybe the british are just different? they are actually interested ,, or does this just make you popular? >> i i think that they are. this combination of the fact that you have a clearly defined target an
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independent forecasting. essentially you are requiring the policymakers to say by how much today want to overachieve the particular target on a central estimate which is essentially how much she wants to take. we have adopted an and indexation. for example, life expectancy. there will be a community every five years. that may not be what you want to be aiming. general willingness to embrace this.
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it is important the emphasis on uncertainty does not give you an excuse to dodge the responsibility. the bank of england used to be so resistant. members of our former profession photocopied, blew it up as large as they could and try to back out from the mid-level probability. a general acceptance, real politics has not been suspended. >> a couple of things. one reason to talk about uncertainty, you can say to the members of congress, i told you so. he testified before the budget community. i think the deeper question, and one that came up in the first panel this morning, by giving long-run forecasts,,
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are you conveying something to policymakers that we don't really know that my in a different state of the world with them to do something? >> we wrestled with how much weight to give, and in fact although long-term projections go out, essentially all the reports we issue talk about the next 25 years and 50 years the on that. we have greatly reduced the emphasis on recognizing that we have less and less knowledge. but i think it is important for us to continue to do work that looks as hard as we can. because challenges that the country faces are not just short-term challenges and the policy responses being weighed are not just
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short-term responses. they are gradual responses and in some cases responses that would not have much until we move beyond the ten year window. it is important for us to look out over a longer time than the standard ten-year budget window, but we are very transparent in the greater uncertainty, and in this last long-term budget outlook this range that we show has a debt to gdp ratio of 25 years and a factor of two to 1. we have conveyed clearly that is lot of uncertainty. uncertainty. debt as large or larger relative to gdp than it yesterday which is an unusually high level by the standards of the country. there is important information and that. >> do you ever find yourself thinking, i wish members of
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congress would not pay so much attention to the score in deciding whether something is good? >> yes. i think too much weight is given, we recognize. the legislators recognize as uncertain. i think that is byproduct a byproduct of ongoing legitimate concerns about the trajectory for the federal that. we often think in particular circumstances that given too much rate relative. let me ask if any of the authors or respondents want to weigh in >> just wait for a mic. >> so quiet. >> just want to make sure week it everywhere down so we can hold that against
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you. >> it won't be you holding it against me. i i want to follow up on doug's question, and maybe it is for both. there probably are a lot of policies that you do think are good policies, but part of the problem may be that when the congressional budget office says no savings, it is not reflected as, we are not certain enough about it to do savings but that it would produce no savings. i think my question is more on on kind of healthcare reform where my guess is there may be areas where you could say here are a number a number of things that probably move in the right direction. we don't have the certainty. certainty. is there a way of expressing without a score and opinion or certainty that these
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things could have a positive affect? you may have things that just become delegitimized by the lack of score even though i don't i don't think that would necessarily be the intention. >> you raise an important. i'm not sure what we can do about it. when when we analyze, for example, the independent advisory board we wrote a long discussion about how this is a group that would have certain avenues open to it and might look for things it could do and it was not the what the group would look to, how successful they would be. budgetary is very explicitly probabilistic. there are other proposals for specific changes. we analyze a few years ago the effects of raising the cigarette tax with direct revenue consequences. it makes the population healthier, and many people expect that would improve outcomes. outcomes. we did an elaborate analysis to conclude that it might
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not. i think it came through clearly in our work that some things that seem to at first blush might turn out to be good or not. that comes through what we are doing. i don't no how else we can. particularly in cases where it is hard to understand what the right.estimate of the effects of legislation would be, to quantify the uncertainty would be much harder. what i found interesting was there are policy notes, characterization of uncertainty. that is not something that we'd do and i i personally have not thought about it. i am not sure if that would help or not. i'm not. i'm not sure what our capability of doing that would be. a large organization. we published 500. we probably did ten times as many. i don't want to sound like i am just focused on running
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the train, but i am. we need to find mechanisms that are feasible with very short time tables for a wide range of legislation. >> the one you showed. you had it marked in yellow. is that something you are asked to do? >> well, i stole this this from the australian parliamentary. we have developed it beyond that. what we have previously done , in the uk, the government, we published the forecast. the government publishes its own scoring's which we have scrutinized before they announce. they know whether we we will say we don't agree with this or not. what they we will say. previously all we had done was say here is a list of 80 measures. we think the following three
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, you put a little bit of language around that. we felt it would be much more useful to have a more systematic and transparent way of doing it. people are quite interested if a particular package consists of a lot of well identified giveaways to the general public. pay for pay for by a large number of uncertainty take toys. >> peter diamond. >> any store is open to some kind of skimming. and with the presentation of all of the details, the gaming is very evident. people know about it. and yet the scoring will role-plays a big role. so a lot of our concern has been as it were over too much. i wish you had included somebody today to did the
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reverse. what was life like before? what was it like without scoring when everybody was making up there own numbers? i certainly remember back, the issue again, social security before we get indexing for inflation. how much we will we raise benefits this year? what kind of limits can we set on it? set the limit, but it was all made up. the system had no automatics , and the scoring was made up. here is a formula. here is a number. congress can hide behind the number one beneficiaries want to bigger things. i think scoring really matters, even as imperfect as it is. >> representative. >> i i love the british way of whole of government accounting and also on a commercial basis. here our posterity is caused
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by state and local government to lay off calais employees. trying to do the right thing how large it is. >> other panelists. please. >> thank you. there was. a longer discussion discussion about what happened prior to the automatics. there was serious consideration. my question is for robert. you took my breath away with one of your grabs. the 2,008 projection through 2014 projections, you had a lowering of your estimation for 2020 of approximately
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15 percent with no apparent trajectory to be closing that gap back. it looks like you're taking a 15 percent bite, at least through 2020. is that your presumption going forward? doesn't that sound like an awful lot of uncertainty? do you really think your 2,008 was that bad? now you have a need for that much correction. >> i'll take that one on specifically. specifically. the first., the 2,008 projection was before we lifted. that was the published projection when the forecast was in political hands. [laughter] that said, i would not say that it was not in political hands, very much closer to where we are now. certainly this has been true since the crisis hit in the uk. also to start with, the whole notion of how big the
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whole that your fiscal consolidation program has to fill in is entirely wrapped up in the judgment of how much potential gdp has moved down. basically you multiply that loss. that tells you roughly your your increase for the structural deficit. now, as you rightly.out,, a lot of uncertainty amongst other people who are looking at this as to how big is decline is. in large part it is very difficult. basically in response to the fact that we have had a weak economic recovery very weak productivity performance. a big supply head. on the other hand though i challenged by the fact that we don't have any wage growth to speak of.
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but i think it is something that is important for us to be upfront about. we are in the middle of a ten year fiscal consolidation program based on filling a gap between one number you can estimate or observed directly and another. >> potential here. >> our estimate for 2017 x 8% or so relative to our projections. we think that think that some of that is due to recession and weak recovery specifically. specifically. some is due to developments up through 2007 that were not apparent. of course, as the curious list goes on,, the recession and weak recovery occupy more and more of the time,, it is harder and harder to disentangle what is due to developments in this business cycle or just the
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mistaken assessment. but the downward revision is substantial, and i think that does provide appropriate caution about taking a particular.estimate at face value. >> i am a journalist. i i don't know how productive this will be. this is for mr. allen dorf. i i am much more familiar with jc to use. a big debate in that world has been over whether or not to account for macroeconomic factors. right now they are mostly basing it. i was wondering what your thoughts were on whether accounting for these factors would reduce uncertainty or increase it. >> let me just quickly, this question of dynamic scoring. the recent commentators, our commentators, our scope for incorporating macroeconomics
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of legislation is limited by the fact that estimates are the responsibility of the staff, not cbo. a second thing to emphasize is that our estimates incorporate a lot of different kinds of behavioral responses. but they don't generally incorporate macroeconomics. another thing to emphasize is that when legislation is being discussed or proposals are being weighed that would plausibly have large macroeconomic effects then we do estimates. so we do this every year in our analysis of the pres.'s budget. president's budget. did it this year for our analysis of german ryan. we do it now every year in our long-term budget outlook we did it last year with the comprehensive immigration legislation. legislation. they did it this year further analysis. so this sort of work is not
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knew to us. we spent a lot of time ourselves proving our model, and in writing reports that spell out how we do that. so doing those kinds of analyses for legislation that would plausibly have noticeable macroeconomic effects and when there is time in the congressional process for us to do it, that is fine. we are doing that now. the question for members of congress is how they want to use that. that is really up to them to decide what role they want to give the estimated macroeconomic effects when they consider legislation. that is appropriately up to the members of congress. >> another question. >> yes. >> henry aaron.
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>> this is a question for you, doug, with, with respect to the alternative fiscal scenario projection which in many corners is regarded as, perhaps, more realistic than the baseline. actually, one of my questions refers to both projections. during the first session when commenting on the projections of social security and medicare hospital insurance, peter diamond observed that probability,, scheduled benefits would be paid in most programs and current revenues would be collected in both programs, the probability of those joint events was about zero. yet both the extended baseline and the alternative fiscal scenario assumed that that zero probability will occur and is fed into projections.
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so with respect to that particular assumption, my question is, what, what do you think about that? are you bound by instructions or statute to estimate in that way, or was this a decision of the cbo? the other question relates to the alternative fiscal scenario only which is the assumption that revenues will continue beyond the ten year budget window at 18 percent of gdp, which is based on historical analysis , but historical analysis at a time radically different in character from the one you are projecting, one in which in the future were we to remain at 18 percent of gdp congress would have to continually cut tax rates in the face of projected widening deficits, which even given congressman cooper's evaluation strikes
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me as verging on callaway, something that they would not do. i appreciate if you would comment on both of those elements of the projection. >> so it is common, as you say, for people to the first to an alternative fiscal solaria -- scenario has more realistic. we don't refer to it that way. alternative scenario has shown that it is skyrocketing, ultimately. that is not a realistic a realistic projection. for our purposes the baseline scenario is meant to correspond roughly to current law, and we think about the alternative fiscal scenario corresponding more closely current policy. the difference was particularly stark when the 2001 2001 tax cuts were scheduled to expire because
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members followed current law incorporating those explorations. many members of congress and their own mind started from a benchmark. they they wanted to understand the effects of policies relative to that. that continuation of the current tax rates. i don't think it is meant to be realistic. peter's concerns don't worry me because i think the alternative scenario is meant to say what would happen if we continue to encourage social security benefits and other benefits and continued with current tax policy. now, we are required by law to follow certain rules in constructing our ten year baseline projection. written into law in 1985
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with some modification. there are rules that we follow and ambiguities. that applies to the ten year projection. the extended baseline baseline projection, we follow the theory of current law and go further out. current law provided technical reasons. federal government currently has a ceiling. even the baseline rules, supposed to be about current law make an accommodation for social security. benefits are legally paid if there's money in the trust fund. we project benefits as if they are being paid. that is the baseline. we follow the same principle the alternative scenario is really up to our judgment, and alternative benchmark,
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what represents policy. the goal is to capture what many members of congress, in the budget. budget. we use our best judgment in trying to be specific. the layout the assumptions we have made explicitly. >> in the baseline you are required to assume that social security benefits are paid? >> on the tax question, what we are trying to capture is what people might think of as current tax policy in a broad sense. what is happening happening is the federal government has collected the equal to about 8 percent of gdp, but no
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trend. trying. trying to show the congress what would happen if they continued with the sorts of tax policies we have had in the past, what will happen in the future. the fact that those lines diverge, that is the fiscal challenge, exactly the., that with the sort of tax policy we had before the federal government will not collect enough money to support the sorts of benefits we have now given the aging of the population and rising costs for health care. our effort to demonstrate why important changes to fiscal policy will probably be needed. and so it is not our job to line those up. it is the job of congress to decide what policy changes. >> first please join me in thanking these two guys.
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[applauding] i also want to remind everybody that all of this and more is on our website. these events don't happen automatically. i want to thank carrie, brendan, emily parker and my colleagues for helping us make this such a success. i have no more certain about what the right answers are, but i am a lot more sophisticated about my understanding of uncertainty. i hope that is the center for center for you. people on the hutchins advisory committee, would like to take a picture. for the rest of you, you, thank you very much. [applauding] [inaudible conversations] >> next on t1 senate debate on the next us surgeon general. then energy secretary on his
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meetings with his canadian and mexican counterparts followed by a senate environment committee hearing on security at chemical facilities. >> tuesday. >> tuesday a forum on us relations with china and south korea. live from the center for east asia policy studies at the brookings institution starting at 9:00 a.m. eastern on our companion network. tuesday, a discussion on on the evil outbreak and the research to create a vaccine the national institute of allergy and infectious diseases will take part in the event hosted by the center for strategic and international studies live at 3:00 p.m. eastern on c-span. >> t1, providing live coverage of the u.s. senate
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for proceedings and key public policy events. every weekend book tv. t1, created by the cable tv industry and brought to you as a public service. watch us in hd, like like us on facebook, follow us on twitter. >> monday, the u.s. senate confirmed the nomination of the us surgeon general. the vote was was 51 to 43. senator john barrasso of wyoming spoke about his opposition followed by democratic dictator but of illinois on his support. this is 25 minutes. the presiding officer: without objection. mr. barrasso: thank you, mr. president. mr. president, i rise today to oppose the nomination of dr. dr. vivek murthy to be surgeon general of the united states. surgeon general is known as america's doctor.
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americans have great respect for this important position. this important position. >> americans have great respect for this important position. they expect their surgeon general to be someone who has substantial experience in helping patients improve their health and in helping them reduce the risk of illness and injury. this important position has been vacant since july of 2,013. about a year and a half. it is far too long, long, and it has been completely avoidable. we have seen how the obama administration has struggled in response to important health issues. america should have had an experience dr. in the job as surgeon general to lead our fight and to take on other serious health challenges as well. a smart man, very
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well-educated, an undergraduate degree from harvard university, an mba from yale, an m.d. from the ale school of medicine, impressive academic credentials, and i am sure he we will be a fine doctor. they dr.. they are simply not sufficient qualifications for this important job. as dr. murphy a renowned expert in treating patients while researching diseases? no, not at all. he is not. has he actually built a career teaching medicine or leading public health organizations? no, not yet. in fact, dr. murphy only completed his medical training, his training, his residency in 2006, just eight years ago. i speak as someone who has practiced medicine for 25 years, 25 years, who has been an instructor of surgery at yale medical
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school that dr. murphy attended, and i saw that being a a dr. is about much more than going to school. doctors learn more and more as they progress through there careers, and they spend more time with their patients, listening to patients and the patient's families. dr. murphy has just not had the time to develop these kind skills. what what qualifies him to be surgeon general of the united states? well, and 2008, just two years out of residency he founded a group called doctors for obama. the purpose? to elect a president. the majority of his career has been spent not as a dr. treating patients but as an activist focused on gun control and political campaigns. even former surgeon general
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richard carmona, former surgeon general richard carmona has said that dr. murphy does not have the medical experience to serve in such an important position. let me.out, doctor carmona is a democrat. he wrote he wrote an article for the huffington post on december 4 titled in search of a surgeon general. let me read read a little bit about what he wrote. he said, we don't appoint dr.'s doctors early in their career to be a university dean for chairman. he said, graduate business students at the top of their class don't become instant ceos. top law graduates of elite law schools don't get nominated to be us attorney general for supreme court justice. he asks, why should the us
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surgeon general be any different? he concludes by asking the question, is the health, safety, and security, and security of the nation any less important? is the health, safety, health, safety, and security of the nation any less important? well, no. it is not. and the job of surgeon general is not less important. americans want the same thing from a surgeon general that they want from there own doctors. people want honest and straightforward advice about medical dangers like cancer, heart attacks, stroke. they don't they don't want an inexperienced, unqualified political appointee. patients don't want a dr. who might let political ideology get in the way of treatment and their best interest. americans don't want a a surgeon general who might
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use this position of trust to promote his own personal campaign against this second amendment of the constitution. this is just another example of pres. obama giving someone an important job based solely upon there support of the president's political career. just like his nomination of a soap opera producer to be ambassador to hungry for the president's nomination of a man to be ambassador to norway when the person did not no the first thing about the country. well, of course, both those nominations to be ambassadors have funneled hundreds of be ambassadors have funneled hundreds of
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thousands of dollars to the president campaigns. well, those nominations were embarrassing, and so is the nomination -- this nomination to be surgeon general. this office of surgeon general is not just an honorary title. it is not just a figurehead position. the surgeon general commands the entire commissioned corps of the uniformed public health officers. only 6700 people that the surgeon general commands. it is one of the key positions leading america's public health efforts. america has a long history of qualified and talented people filling this job. when pres. bill clinton nominated david sacher in 1998 he 98 he had already served as president of the medical school. and director of the centers for disease control and prevention. see edward see edward cooper had spent 35 years as a leading world renowned pediatric surgeon. they were they were substantial candidates who brought serious experience to the job. the responsibilities of being america's surgeon general require a strong,
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professional leader and the american people deserve a qualified nominee. there is a long list of capable doctors who could read -- who could meet those requirements. the president should pick one. one. when the president nominates qualified people for this position the senate has approved their nominations on overwhelmingly bipartisan votes. when president obama nominated regina benjamin to be surgeon general she was confirmed unanimously. so was richard carmona. even democrats have objected to the nomination. pres. obama thinks dr. murphy is qualified. why have have we not voted on him?
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he was nominated more than a year ago. confirmation confirmation hearing in the committee was last february. majority leader could have brought this up for a vote at any time in the past nine months, but he did not do it why? he knew this nominee, this unqualified nominee, this partisan nominee did not have the votes, could not get the votes on the democrat side of the aisle. the nomination the nomination would have been an embarrassment before the election. now is not the right time for this nomination and it is not the right job for doctor murphy. the evil of problem and the other health crises facing our nation are enormous challenges that require skills, talents that this nominee has simply not had time to develop and which he has so far not demonstrated
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in his career. i want to close by quoting from a letter that former surgeon general carmona sent to all of the members of the senate earlier this month, to each and every one of us. mme.. madam president, i ask unanimous consent that this be made part of the record. this is what he wrote about doctor murphy, former surgeon general, democrat about the current surgeon general mamma nominee who we are going to vote on later today. his partisanship and lack of qualification for the job of surgeon general gives this nomination ascent of political patronage. someone who actually served a surgeon general added in
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his letter to all the members of the united states senate, his confirmation would undermine the credibility and the authenticity of the office of surgeon general. undermine the credibility and the authenticity of the office of surgeon general while demeaning the selfless service of qualified career uniformed officers who merit consideration. someone who would undermine the credibility and the authenticity of my office surgeon general while demeaning the selfless service of qualified career uniformed officers. americans deserve a a surgeon general who has
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substantial experience in managing complex crisis. the american people deserve a a surgeon general who has proven throughout his or her career that their main focus is a a commitment to patients, not a commitment to politics. dr. murphy has time to learn, time to gain experience, and that may make him a fine surgeon general sunday,, but that day is not today. madam president, i call on the senate to defeat the nomination of doctor murphy for surgeon general. >> we disagree on the nomination to be our next surgeon general.
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i would like to speak for a few moments on why am supporting it and while the majority will join me in support of his nomination. this is an indication of what can go wrong in the senate. we received we received this nomination from the president of the united states to fill the post of surgeon general reported from committee in february of this year. been sitting here since february. the post has been taken since july. speaking to public health. can anyone think of a public a public health issue that we have had to face since february when doctor murphy was reported? perhaps one of the deadliest diseases that has ever been recorded is being fought in west africa, and we are being asked on a regular
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basis how we will respond in the united states. the center for disease control plays a major role in it, but it, but historically surgeon general have played a major role when we faced similar public health challenges. i can i can remember coming to the united states house of representatives years ago when president reagan had been elected, and he had chosen edward cooper to be his surgeon general. a controversial choice by pres. reagan president reagan because he had been outspoken on some major political issues. he personally had strong feelings against abortion and had said as much before his nomination and some other issues and it led many people to believe that he was too political for the job and that president reagan had made the wrong choice. he was chosen despite the fact that he had been at least engaged as a medical
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dr. and discussing political issues. he was chosen. i was not in the senate at the time, but i will tell you this, when doctor coupe took over as surgeon general he made it clear that he understood that his obligation was to be the nation's dr., not the nation's leading medical politician. he did some extraordinary things. i don't no what america would have been like if it were not for his presence pushing back on a lot of political spin when it came to public health issues, issues involving aids. it is no secret. it is is well known that many politicians in both parties were reluctant to go into the whole issue of the aids crisis in america for a variety of reasons. if you we will remember, history shows that that under doctor coupe we ended
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up mailing every household in america to let them know about the danger of the aids epidemic. that was an extraordinary act of public. so those who worried that he was just too political for the job were disabused of that notion as we watched his service to our country. i make that.because i don't want the same mistake to be made in criticizing doctor murphy who we are going to vote on later today to be our next surgeon general. it is true that he engage in political activity has any american citizen is entitled to. i hope it would not disqualify him, but i read in a few moments the groups that are supporting them.
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you will understand that he is not in this position of being nominated simply because of his political activity. he has an extraordinary backing of individuals in the medical profession. now we need him more than ever. we need to fill the post of surgeon general of the united states of america. we hope that we can cnn's to the epidemic. we are not quite there. we there. we ought to have a surgeon general in the united states of america. waiting till february, and we had to do some extraordinary parliamentary moves to bring his name up for a vote. it is time for us to vote, and it is time for us to confer the nomination. this this past year americans have battled public health crises on all fronts. here at home spread from state to state threatening and children.
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my home state was one of the hardest hit. i heard from doctors across the state the minute they discharge one child with respiratory systems another came in. we still face the worst epidemic in history. with over 6300 deaths and many more diagnosed with this devastating disease now more than ever america needs to fill the spot of top doctor. and has been vacant since july, since july. he is that doctor, and i am proud to vote for him. i am hoping my colleagues will join me. let me tell you a little bit of his background. an instructor at the harvard medical school. extraordinary about him,
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treating his patients individually, he also thinks about the systemic issues affecting the health of patients and tackles those as well. he is a leading voice in public health publishing his research on the participation of women and minorities in cancer clinical trials and top journals including science, the journal of the american medical association and journal of the national cancer institute. critics who say he is not up to the job should just look at the literature. he is published in medical research areas of great import. he also cofounded and chairs the trial networks, a software company that helps clinical researchers collaborate more effectively and efficiently with for developers to speed up there discovery. appointed to the advisory. over 100 national state and local public health
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organizations have endorsed this nomination. they described him as a well-qualified forward thinking innovative leader with a strong commitment to public health. does that sound like a political hack? the organizations that support doctor murphy include the american college of physicians, the american family physicians, the american family of pediatrics, the american public health association, association, the american hospital association, the american cancer society, the american heart association and the list goes on from their. in the confidential hearing before the senate health committee last february dr. murphy stated if confirmed he would prioritize his efforts of obesity and tobacco-related disease and make prevention and health promotion the backbone of our communities. this is something i share.
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for the past 30 years 30 years i have worked on the issue of tobacco and public policy. i worked to reduce youth smoking and implement programs to help people to quit and rein rain in the most insidious practices of the tobacco industry. moreover, i have cochaired the senate hunger caucus have become familiar with the complex and arguably unjust way food is distributed and consumed in america simultaneously facing high levels of insecurity and high rates of obesity. obesity and tobacco-related diseases are part of a growing trend of chronic disease that claims seven out of ten deaths in america and makes up 86 percent of america's healthcare cost.
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dr. murphy says these are his priorities. they should be. these statistics are unacceptable. i believe dr. murphy understands the importance of the national crises before him. i feel confident that his experience, training, and tenacity have proved that he has the qualifications needed to tackle these issues. born to parents who originally were from the southern part of india. he came to the united states at the age of three. he was valedictorian of his high school and graduated magna cum laude from harvard in three years. senators who come to the floor and question this man's resume, his ability, for goodness sake, his extraordinary background. from an early age she did not set out to make money.
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he set out to make a a difference. in 1995 he cofounded visions worldwide, nonprofit organization that conducts and supports hiv-aids education. serve as the president. a dedicated uncle and frank consistently described by those who no him as humble, so spoken and tireless. so proud of his accomplishments. mdm. pres., many years years ago i worked for a state senator in illinois for every political controversy when you listen to the argument to understand there is a good reason and the real reason. the real reason for the opposition? it may come down to just one
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thing. during the course of his hearing he said that he believed that gun violence was a public health issue. gun violence, public health issue. for making that statement he has been pilloried and antics oriented by the gun lobby and maybe a major reason why is controversial. gun violence is a public health problem. go to the emergency rooms and i will give you the list of the names of hospitals in chicago to start with. go to an emergency room on a friday or saturday night, and you tell me it's not a public health issue. in those emergency rooms you'll see the victims that
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have been fighting for their lives. lives. if you go to mount sinai hospital in the inglewood section of chicago you can look across the street to a rehab institute. those who survive gun violence go across the street to the rehab institute and learn how to live a life as a paraplegic or quadriplegic. does that have anything to do with public health? it certainly does. i i think doctor murphy, like doctor coupe, has made it clear that had not asked to be the leading dr. in america and to engage in public health debates, things that make a dramatic difference. i don't they we will be an
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extraordinary surgeon general. i am sorry support his nomination. nomination. at this time of challenge when it comes to public health issues we need his lead. >> on the next washington journal adlai stevenson talks about a provision in the 1.1 troy in dollars spending bill approved by congress that would ease the regulation of derivatives under the dodd frank act. bipartisanship and government and their own differing views. the survey for partnership for public service. president and ceo join us. we will take your phone calls and look for your comments. washington journal
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is live every day at 7:00 a.m. eastern. >> tuesday of forum on us relations with china and south korea. live at the brookings institution. ..

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